Get the Most from Your Vendor Relationships

By: Tom Shay

From: IGC Retailer, November/December, 2012

 
Get the Most from Your Vendor Relationships
When selecting vendors for your garden center, you have expectations they must meet, like competitive prices, high fill rates, prompt delivery, the right mix of products, acceptable terms and assistance from company representatives. But we’ve all faced challenges with vendors. While you can’t make all of the potholes go away, you can do several things to reduce the likelihood of problems arising.

The first is to realize that as much as you dislike customers who shop only on the basis of lowest price, the same should be true for your business. No vendor is going to have the lowest price on everything. There are other factors to be considered for a profitable relationship.

The second consideration is that you should be clear in defining your expectations. There is no better place to do so than when you place an order for merchandise or services. Using your purchase order form, be specific in stating all of the terms of the order. Be clear in the quantities you are ordering - each, dozen, case, pallet. Extend the order on each line as to the total cost of each item. The same is true with extending the total of the order.

You should clearly state on the order form when the merchandise is to be delivered. At the same time, the order should also have a designation, “Cancel if not received by a certain date.” No garden center wants spring merchandise showing up in late June.

When you’re ordering merchandise that is a part of a complete display or selection, you can state on the purchase order to “only ship complete.” This could eliminate having that order show up at your garden center in multiple shipments.

Where appropriate, when you are paying for the freight, indicate how the merchandise is to be delivered to your garden center. Although many vendors have staff whose responsibility is making the decisions regarding logistics, it is acceptable for your order to indicate, “cheapest possible.” For example, a 60-pound order shipped with a carrier that has an initial rate of “up to 100 pounds” likely indicates you’re paying an excessive rate for the merchandise. A carrier whose rates are by the pound, beginning at 1 pound, would probably be a better choice. It is appropriate to charge back to the vendor the difference in freight rate charged and the “cheapest possible.”

Cooperative advertising dollars, samples, display fixtures, signage and other support material should also be clearly stated on the order form. You should put the name of the sales representative on the order in the event any follow up discussion is required with the vendor and you need to state who took the order.

Every purchase order written is an agreement between two parties. While it does not say so, a third party is present in the agreement - your customers. Indirectly, you are negotiating with the vendor on behalf of your customers. If you expect the customer to be loyal to your garden center, then it’s your responsibility to do your best in representing the customer when you work with a vendor.

Great vendors already know this. They understand that no sale is complete until the product or service has been delivered to the customer. And no relationship is complete unless the customer continues to do business with the retailer.

It’s only a good deal if it’s a good deal for both parties involved.

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